Why Your Sales KPIs Need to be Activity Based

sales KPIs activity basedSo you’ve got all sorts of sales reports in your CRM system.

They show you lead sources, proposals sent, deal size, close rate and so on.

But there’s a problem: Looking at a sales report will tell you if you didn’t close enough deals this month, but it won’t tell you why.

The data in your sales reports is helpful, but it doesn’t change someone’s behavior. And there’s a difference between reporting — looking at data of what happened — and activity management in real time.
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Why Your Sales KPIs Need to be Activity Based

At this very moment, your salespeople are making decisions on how to spend their time. Are you making sure they’re focused on the right activities?

That’s activity management. And you monitor those activities through activity or behavior based key performance indicators (KPIs).

Activity management is, by nature, actionable. Not only does it enable you to make sure reps spend the right amount of time on certain activities, but it allows you to reward the reps performing well, coach the reps that aren’t and course-correct your sales team, if necessary.

But, how?

As sales leader, you can engage in activity management by placing KPIs around the behaviors and activities that matter most to your sales process.

As a note, KPIs will be different for every sales organization and team. For sales development teams, they might be things like leads generated or meetings set. Similarly, account executive teams might have KPIs like discoveries conducted or proposals sent.

So, where do you start?

Start by defining your sales process. Which activities lead to sales for your team?

Here’s an example of what a sales process might look like:

Lead Generated > Prospect Qualified > Demo Scheduled > Proposal Sent > Deal Closed

Then take a look at your historical data. If you need to generate $1 million in sales this quarter, and your average contract value is $100,000, then you need to close 10 deals. If you know that it takes an average of 4 proposals before you close 1 deal, then you need to send out 40 proposals this quarter.

Continue to reverse engineer your sales process in this manner until you reach the very first (or earliest) step. When you determine how many leads your reps need to generate (based on that historical data), divide it by the number of reps you have. That’s your first KPI to manage your reps by.

You’re starting to get the idea…

Now measure where your sales reps are against their KPIs in real time with something like a scorecard.

If you see that your reps don’t generate enough leads one week, then you know that you have to get them focused on lead generation — maybe even add a few coaching sessions around the activity. The same goes with all of their other KPIs.

Now get ready to see how activity management increases sales performance.

Interested in even more sales performance tips? Grab the best pieces of advice from sales experts wrapped up in one eBook:
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